Clark and David Are Partners

question 36

Multiple Choice

Clark and David are partners.Clark has contributed $25,000.David has contributed only his time and skill.On dissolution,after all firm debts are paid,$20,000 in assets remains.Which of the following is NOT correct?

• A) The $20,000 remaining after payment is profit that will be equally divided.
• B) The partnership has sustained a loss of $5,000.
• C) David is not entitled to any part of the $20,000.
• D) David has no obligation to reimburse Clark for any loss.

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Definitions:

Pairwise Voting

An electoral system method where candidates are matched in pairs and the winner of each pair is determined by a vote to choose the most preferred option.

Government Intervention

The involvement or actions by a government in a market, often intended to correct inefficiencies and failures.

Asymmetric Information

Asymmetric information exists when one party in a transaction has more or superior information compared to another, leading to an imbalance in power and potentially unfair outcomes.

Wage Changes

Adjustments in the rate of pay received by workers, which can be influenced by factors such as inflation, market demands, and changes in productivity.